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Excise Duty by 1st or 2nd Stage Dealer...!

Rajeev Nair (Finance Professional) (510 Points)

16 February 2009

Hi..

My query is... A - is a manufacturer and B - is a Trader...

Both are located in one State say Maharashtra...

Now B" purchases materials from A' @ Rs.100/- + 10.30% + 4% VAT p/kg

and want to sell the same to C" who is located outside Mah- say Gujarat

@ Rs.120/- + 10.30% + 2% CST

Is this transaction is possible under Excise, b'se the manufacturer is charging

a duty of Rs.10.30/- and the Trader wants to charge the duty @ Rs.12.36/-

Can he make any payment by PLA [ of Rs.2.36/- ] ?

Reason behind this is that B" dont want to disclose its customer to A' and want

to sell the material at a higher value with a profit of Rs.20/- p/kg

Please explain....Thanks in Advance

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22 Replies

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 16 February 2009

Well Rajeev, certainly the dealer can sell goods at a higher price and there is no restriction on this under Central Excise law.

However, the dealer will only pass on that much duty as has been paid by the manufacturer. he is not required to pay any duty or pass on any higher duty to his buyer. The first part of the invoice will show that commercial value and excise duty will be Rs. 10.30 only (dont worry if it is not 10.3%, it need not be). At the bottom of the invoice, the dealer is required to give details of the manufacturer invoice on which he is passing on the credit. Dealer is not required to disclose anything to the manufacturer.

2 Like

Rajeev Nair (Finance Professional) (510 Points)
Replied 17 February 2009

Rajeshji, thanks for the comments...regret that i wont be able to get into this business, as it would be disclosing my purchase price to the customer [C]

However...thanks once again...

Prateek (Director) (34 Points)
Replied 24 February 2009

Hi..

My query is... A - is a 1st Stage Dealer and B - is a Manufacturer...

Both are located in one State of West Bengal...

Now "B" purchases Oil from A' @ Rs.33 + 12.5% VAT

"A" gives two bills to "B".

1) Excise Bill (1st stage dealer bill) which shows Basic Rate @ Rs. 44 + 14.42% Excise, and gives details of Invoice from Indian Oil @ Rs. 44 + 14.42%

2) VAT Bill @ Rs. 33 + 12.5% VAT.

"B" pays Rs. 33 + 12.5% only.

Can "B" claim Excise for 44x14.42% ? If not then for what rate can it claim.

Please explain....Thanks in Advance

P.S. The Excise Rate applicable on the prodcut is 14.42%

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 25 February 2009

The dealer will take credit of duty paid by the manufacturer. further the dealer will pass on credit paid by the manufacturer. Any change in price, in between is irrelevant.

Raja. P (Accountant) (20 Points)
Replied 03 August 2009

Can we pass on ACD 4% also?

Ajit Kumar Thakur (service) (22 Points)
Replied 07 September 2009

Originally posted by :Rajesh Kumar
"	Well Rajeev, certainly the dealer can sell goods at a higher price and there is no restriction on this under Central Excise law. However, the dealer will only pass on that much duty as has been paid by the manufacturer. he is not required to pay any duty or pass on any higher duty to his buyer. The first part of the invoice will show that commercial value and excise duty will be Rs. 10.30 only (dont worry if it is not 10.3%, it need not be). At the bottom of the invoice, the dealer is required to give details of the manufacturer invoice on which he is passing on the credit. Dealer is not required to disclose anything to the manufacturer.	"

AP Mathi (ACCOUNTS MANAGER) (21 Points)
Replied 30 March 2010

we are 1st stage dealer in mumbai and we have branch at Gujrat my query is whether we can transfer our excise duty to gujrat and what is our position whether we are a 1st stage dealer in gujrat or 2nd stage dealer in Gujrat

A.P.mathi

R.Sankaranarayanan (Indirect Tax Executive) (163 Points)
Replied 15 July 2011

Hi Mr. Rajesh,

""Well Rajeev, certainly the dealer can sell goods at a higher price and there is no restriction on this under Central Excise law.

Can you please provide me with the info regarding the relevant Section / Rule / Notification , which require the Central Excise dealer to disclose his procurement details??

Thanks in advance...

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 15 July 2011

Originally posted by : R.Sankaranarayanan
	Hi Mr. Rajesh, ""Well Rajeev, certainly the dealer can sell goods at a higher price and there is no restriction on this under Central Excise law. However, the dealer will only pass on that much duty as has been paid by the manufacturer. he is not required to pay any duty or pass on any higher duty to his buyer. The first part of the invoice will show that commercial value and excise duty will be10.30 only (dont worry if it is not 10.3%, it need not be). At the bottom of the invoice, the dealer is required to give details of the manufacturer invoice on which he is passing on the credit. Dealer is not required to disclose anything to the manufacturer."" Can you please provide me with the info regarding the relevant Section / Rule / Notification , which require the Central Excise dealer to disclose his procurement details?? Thanks in advance...

/forum/files_download.asp?msg_id=405042

download the file, try to fill it and understand what the dealer is likely to fill out and disclose in dealers invoice.

ashwin (proprietor) (21 Points)
Replied 12 September 2011

My query is... A - is a manufacturer and B - is a Trader...

Both are located in one State say Maharashtra...

Now B" purchases materials from A' @ Rs. 100/- + 10.30% + 5% VAT p/kg

and want to sell the same to C" who is located in Maharashtra

@ Rs. 120/- + 10.30% + 5% VAT

Is this transaction is possible under Excise, b'se the manufacturer is charging

a duty of Rs. 10.30/- and the Trader wants to charge the duty @ Rs. 12.36/-

Can he make any payment by PLA [ of Rs.2.36/- ] ?

Reason behind this is that B" dont want to disclose its customer to A' and want

to sell the material at a higher value with a profit of Rs. 20/- p/kg

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 17 September 2011

Originally posted by : ashwin
	My query is... A - is a manufacturer and B - is a Trader... Both are located in one State say Maharashtra... Now B" purchases materials from A' @ 100/- + 10.30% + 5% VAT p/kg and want to sell the same to C" who is located in Maharashtra @ 120/- + 10.30% + 5% VAT Is this transaction is possible under Excise, b'se the manufacturer is charging a duty of 10.30/- and the Trader wants to charge the duty @ 12.36/- Can he make any payment by PLA [ of Rs.2.36/- ] ? Reason behind this is that B" dont want to disclose its customer to A' and want to sell the material at a higher value with a profit of 20/- p/kg

not possible for a trader

if the excise duty invoice is not mandatory for C then he can sale at any price, but during issue of cenvatable invoice he has to declare his cost of purchase and excise contents.

Nanda Kumar (Accountant) (21 Points)
Replied 02 July 2012

Hi..

My query is... A - is a manufacturer and B - is a Trader...

A , is located in other country and the B, is located in India like Karnataka

Now B" purchases materials from A' @ Rs.100/- and want to sell the same to C" who is located inside India, like Jamshedhpur

@ Rs.120/-2% CST

Is this transaction is it possible, where Excise Duty is applicable for B

Please explain....

Thanks in Advance

Nanda Kishore

Rahul (Proprietor) (25 Points)
Replied 29 June 2013

· We are trader of industrial oil & we do not have excise registration on our name. However my brother in law having different firm which is registered under excise. Now to offer best rates & grab more orders we want to pass on excise benefit to customers from our firm also.

· In that case we have heard that we can show our name in excise invoice as buyer & our customer name as consignee.

· But to pass on excise duty to customer we want to show our sale rate to customer not our purchase rate.

· In that case can my brother in law issue me different commercial invoice of my original purchase rate?

· Or any other best option that will not disclose our purchase rates & we can pass benefits to customer also.

We thank you in advance & look forward to receive your reply.

AASHISH BOHRA (TRAINEE AND CA FINAL) (25 Points)
Replied 17 December 2013

in case of the dealer dealer ( only 1st and 2nd stage dealer) can pass that much crdit which it has paid to the manufacture on the purchase. in case if he sells the same at higher prices then he has to restrict the duty to that which has been paid ont the input transaction